Conrad Playground Supply underwent a restructuring in 2021. The company conducted a thorough internal audit, during which the following facts were discovered. The audit occurred during 2021 before any adjusting entries or closing entries are prepared.

1. Additional computers were acquired at the beginning of 2019 and added to the company’s office network. The $46,000 cost of the computers was inadvertently recorded as maintenance expense. Computers have five-year useful lives and no material salvage value. This class of equipment is depreciated by the straight-line method.
2. Two weeks prior to the audit, the company paid $18,000 for assembly tools and recorded the expenditure as office supplies. The error was discovered a week later.
3. On December 31, 2020, merchandise inventory was understated by $80,000 due to a mistake in the physical inventory count. The company uses the periodic inventory system.
4. Two years earlier, the company recorded a 5% stock dividend (2,200 common shares, $1 par) as follows:

The shares had a market price at the time of $11 per share.

5. At the end of 2020, the company failed to accrue $108,000 of interest expense that accrued during the last four months of 2020 on bonds payable. The bonds, which were issued at face value, mature in 2025. The following entry was recorded on March 1, 2021, when the semiannual interest was paid, as well as on September 1 of each year:

6. A three-year liability insurance policy was purchased at the beginning of 2020 for $72,600. The full premium was debited to insurance expense at the time.

Required:
For each error, prepare any journal entry necessary to correct the error, as well as any year-end adjusting entry for 2021 related to the situation described. (Ignore income taxes.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

DD LTD

DD Ltd operates a business to do with warehousing and distribution of books and CD’s for K Ltd, an on-line business. For this purpose, DD rented warehouses in each major town in the country and the actual delivery of orders was outsourced to a courier service. The market was becoming increasingly competitive and the year ending 31 December 2015 had not been as successful as the previous years. The founder and CEO was very frustrated with the complex integrated computer system that dealt with all the logistics. The system is down most of the time; as a result, money is lost through lost business and poor service delivery.

The CEO has is of the view that there is real fear that K Ltd may penalize the company or indeed engage another company in the place of DD. A lot of money is spent on computer consultants who practically live at DD’s offices and what is worse they do not appear to make any difference.

Since the logistical system was linked to the general ledger, all the problems had been making meaningful reporting and financial management extremely difficult. This has caused the DD accountant to quit just before year end and in desperation he had come to you for help. The bookkeeper extracted the following information for the year ending 31 December 2015 and forwarded it to you (all accounts are to be prepared to the nearest K1000):

1. K Ltd was DD’s only customer and all sales were made on credit. DD processed 1.62 million orders during the year and charged K Ltd K20 per order fulfilled.
2. The delivery charge paid to the courier was treated as the cost of goods sold and it was K6.50 per order
3. At the time of setting up DD K20 million ordinary shares of par value K1 per share were issued. There has been no further share issue since then.
4. General and administrative expenses for the year were worth K6.2 million
5. Selling and marketing expenses were estimated at 2½% of sales.
6. The non-current assets consisted of IT infrastructure and warehouse equipment. They were valued at K57.63 million after depreciation expense for the year of K4.34 million
7. There was no long-term loan or overdraft. Hence there was no interest expense in the year.
8. K Ltd takes a long time to settle its accounts and as at year end was taking 56.7 days to settle their account.
9. The goods in the DD’ s warehouse belonged to K Ltd. Packaging material and consumables on hand at 31 December 2015 were valued at K0.420 million.
10. Retained earnings b/f on 1/1/2015 was K50.948 million.
11. The couriers were owed K0.610 million at 31/12/2015.
12. Company income tax rate was 25% and company dividend policy was to pay half the earnings after tax as dividend.
13. The CEO knew that they had a lot of money in the bank at the year end, had not received the bank statement and no reconciliation statement had been prepared.

The CEO wanted you not only to finalise the accounts for the year ending 31/12/2015 but also needed serious advice about the financial implications of ideas he had for the following year. The large IT company that supplied and supported the IT infrastructure had approached him with a proposal. They suggested that DD sell them the system and outsource the entire function to them. He really liked the idea of getting rid of this headache and would need the cash if he was going to explore his other ideas. For the last two years DD had not been happy with the property developers who leased the warehouse to DD. The CEO felt that they were too expensive and did not honour the accepted responsibilities of a landlord. He had spoken to them and discovered that as landlords they were in fact keen to get out of industrial property altogether. They offered to sell the buildings to DD for a reasonable price and the CEO liked the idea of not being held at ransom by them in the future. It was however a big decision for him to make and would necessitated DD borrowing quite a lot of money for the first time ever. After discussions with you and his operating team, he asked you to prepare a budget projection based on the following information:

• Transaction volume would increase by 30%. K Ltd were not prepared to put up their rate, so it would remain at K20 per order fulfilled
• DD would sell their IT infrastructure for its book value of K34.8 million and the outsourced service provider would charge them a flat fee of K1 per transaction
• Cost of sales would rise to K7.50 per transaction as the IT cost of K1 would be added to the existing delivery charge of K6.50 which would not change from last year
• The warehouses would be purchased for an amount of K92 million and to help fund this CEO had sourced a long-term loan of K54 million. The interest on this loan would be K6.83 million for the year
• The warehouses were not going to be depreciated at all, so the charge for the year ended 31/12/2016 would drop to K2.77 million
• Stock levels were predicted to increase to K0.72 million by year end
• The tax rate and company divided policy were not expected to change
• The CEO was determined to manage the K Ltd account better during the following year and felt that he could get their average time to payment down to 51.5 days. However, as the delivery courier was pushing for even earlier payment the CEO felt that it would be prudent to budget creditors as exactly the same nominal value as last year
• General and administrative costs would be reduced to K4.2 million for the year and this would enable the CEO to up marketing expenses to 4% of sales. He felt that it was a good idea to for him to look for new clients to reduce his dependency on K Ltd and help utilize spare capacity
• The CEO still did not want to have an overdraft and wondered what cash position the above scenario would leave the company with.

ASSIGNMENT 1

1. Prepare the statement of income for the year ending 31/12/2015
2. Prepare the statement of financial position as at 31/12/2015
3. Prepare a cash flow statement for the year ending 31/12/2015

Choose any stock (your choice) from one of the US Stock exchanges and plot the monthly (beginning) prices of this stock for all of 2019, through Oct 1 of 2020. You should 22 data points. Briefly explain whether or not this stock would add credence to, or not, for the Efficient Markets Hypothesis (EMH). This is not a quantitative question, per se, but provide appropriate rationale to support your answer.

4. Please compare the organizational structure of the two generations of McDonald in terms of similarities and differences considering the basic challenges of organizational design? (First generation is two founder brothers’ restaurant, the second generation is the one created by Roy Croc. The case for this question is the movie: The Founder)

In this problem, assume that the distribution of differences is approximately normal. Note: For degrees of freedom d.f. not in the Student's t table, use the closest d.f. that is smaller. In some situations, this choice of d.f. may increase the P-value by a small amount and therefore produce a slightly more "conservative" answer.

Are America's top chief executive officers (CEOs) really worth all that money? One way to answer this question is to look at row B, the annual company percentage increase in revenue, versus row A, the CEO's annual percentage salary increase in that same company. Suppose a random sample of companies yielded the following data:

Do these data indicate that the population mean percentage increase in corporate revenue (row B) is different from the population mean percentage increase in CEO salary? Use a 5% level of significance. Solve the problem using the critical region method of testing. (Let d = B − A. Round your answers to three decimal places.)

Interpret your conclusion in the context of the application.

Fail to reject the null hypothesis, there is insufficient evidence to claim a difference in population mean percentage increases for corporate revenue and CEO salary.Reject the null hypothesis, there is insufficient evidence to claim a difference in population mean percentage increases for corporate revenue and CEO salary.    Reject the null hypothesis, there is sufficient evidence to claim a difference in population mean percentage increases for corporate revenue and CEO salary.Fail to reject the null hypothesis, there is sufficient evidence to claim a difference in population mean percentage increases for corporate revenue and CEO salary.

Downstream Intercompany Land Transactions

Saucony Company, a wholly-owned subsidiary of Puma Company, purchased a tract of land from Puma in 2019 for $5,000,000. Puma originally acquired the land for $2,000,000 and accounts for its investment in Saucony using the complete equity method.

Required

a. Assuming that Saucony still owns the land, give the working paper eliminations needed for the intercompany land sale when consolidated statements are prepared at the end of 2019 and 2020.

Enter numerical answers using all zeros (do not abbreviate to millions or thousands).

b. If Saucony sells the land to a third party for $4,500,000 in 2021, prepare the eliminations needed for the intercompany land sale when consolidated statements are prepared at the end of 2021.

The following question is from organizational behavior

Research results have shown that resumes, where candidates have ethnic-sounding names, are less likely to be called in for a job interview.  Use Bruner’s model to explain why this might be happening.  What perceptual biases might explain lower callbacks and interview invitations received for resumes with ethnic-sounding names?  

Question B1

In 2002, Musk sold his second internet startup, PayPal, to eBay for $1.5 billion. His first company, a Web software firm, was acquired by Compaq. Currently, Musk is the CEO of Space Exploration Technologies (SpaceX) and Tesla Motors, and also the chairman and the largest shareholder of SolarCity, an energy technology company. SpaceX, which builds rockets for companies and countries to put satellites in space, was the first private company to deliver cargo to the International Space Station. It’s reigniting interest in space exploration. Tesla Motors is the world’s most prominent maker of electric cars and is proving that electric cars can be green, sexy, and profitable. SolarCity is now the leading provider of domestic solar panels in the United States. Each of these ventures has transformed an industry: PayPal – Internet payments; Tesla – automobiles; SpaceX – aeronautics; and SolarCity – energy. (Modified from source: Kristoffer Tripplaar/Sipa USA (Sipa via AP Images)

Based on the above case, name the type of problems Musk deal with when developing these new ventures.

B2

In early 2020, Hong Kong was hit by a disease – Coronavirus. As more and more people were infected with Coronavirus, citizens had adopted the practice of wearing masks whenever they got out of their homes. Thousands of people lined up in streets and wait overnight for a chance to purchase masks for themselves and their families. The price of masks, when they were available, had increased from HK$1 a piece to HK$10 or even more. Mr. Wong was a restaurant owner. He was shocked by the situation and he wanted to help. He tried to purchase masks from sources all over the world but was unsuccessful most of the times. Through an old friend in Egypt, he finally found a mask manufacturer in Egypt – the Pyramid Mask (PM). PM agreed to sell a machine that can produce 100,000 masks per day to Mr. Wong. They could also supply all the raw materials that were needed to manufacture the masks. As Mr. Wong is not a technical person, PM even agreed to send an engineer to Hong Kong for 3 months to solve all the problems that were expected in starting a new factory. However, PM insisted that the products must be sold under PM’s brand name and Mr. Wong had to pay a fee.

Based on the above case, identify the approach Mr. Wong used to go international.

•As the world is getting more and more connected, will the world become uni-cultural in the near future? Which are the homogenizing and which the hydrogenizing forces in general? And in your home country Finland? How do you see the relation of culture and globalization in light of the recent pandemic (incl. how countries are (re)acting)?